Ashland hospital, Dignity Health boards OK merger

The boards of Ashland Community Hospital and the San Francisco-based Dignity Health group have approved a merger of the two organizations.

By Sam Wheeler

The boards of Ashland Community Hospital and the San Francisco-based Dignity Health group have approved a merger of the two organizations.

The ACH board also voted Wednesday to formally ask the Ashland City Council to approve the partnership and a lease agreement with Dignity Health, said Janet Troy, ACH director of development.

The alliance requires the city's approval because when the city turned the hospital over to the not-for-profit Ashland Community Healthcare Services in 1996, it retained sole corporate membership, according to city documents. Before 1996, the hospital was a department of the city.

The agreement gave the city the power to approve the sale, sublease, merger or consolidation of ACH assets with any affiliation partner. The city also retained ownership of the property, buildings, improvements and fixed equipment.

Dignity Health and ACH boards voted to approve the agreement on Tuesday and Wednesday, respectively, according to an email from ACH board Chairman Doug Gentry.

Dignity Health and ACH have signed a memorandum of understanding on the potential merger, but a definitive agreement will have to be signed before anything is official.

"Dignity is a classy outfit. "… This affiliation will make certain we have the resources to strengthen Ashland Community Hospital and grow into the future," Gentry said. "The sooner we can do that, the better."

The City Council is set to hear an informational presentation from representatives of both organizations during its Oct. 16 meeting, which begins at 7 p.m. in the Council Chambers, 1175 East Main St., said City Administrator Dave Kanner.

The meeting will be open to the public, but is "not intended to be a public hearing or debate on the issue," he said.

A public hearing on the possible merger will most likely take place during the Nov. 6 or Nov. 20 council meetings, he said.

Kanner is currently negotiating the terms of a lease with Dignity Health, he said.

The council likely will vote on the affiliation and lease agreement during the same meeting, said Ashland Mayor John Stromberg.

Dignity Health operates 40 hospitals and 150 care centers in California, Arizona and Nevada, employing about 65,000 people. If a partnership is formed with ACH, it will be the health care system's first affiliate in Oregon.

Earlier his month, several of the nearly 100 people who attended two public forums on the merger voiced their concerns over Dignity Health's stance against the Oregon Death with Dignity Act, and its banning of direct abortions unless the mother's life is at risk.

If a merger is formed between Dignity Health and ACH, its working physicians would not be able to prescribe patients who qualify under the Oregon Death with Dignity Act any medication that induces death upon ingesting.

Unreimbursed costs associated with treating Medicare and Medicaid patients, other unpaid medical bills and charity care contributed to a $2.5 million loss last fiscal year for ACH. The hospital also posted a $1.5 million loss on operations during the 2008-2009 fiscal year.

Considering ACH's multimillion dollar loss over the past several years, ACH Chief Executive Officer Mark Marchetti said a partnership would strengthen the hospital's ability to compete with larger hospitals in Medford and increase revenue and patient services.